The company’s Q1, 2023 unaudited financials released on the
Nigerian Exchange Limited revealed a profit after tax growth of 44.3 per cent
year-on-year with an earnings per share of N1.05 as against N0.73 in Q1, 2022,
following an expansion in gross margin of 458bps year-on-year.
Dangote Sugar’s revenue grew by 8.2 per cent year-on-year in
Q1, 2023, supported by increases across its product lines.
Gross margin increased to 25.2 per cent, as revenue grew
faster than cost of sales. Consequently, EBITDA (+407bps) and EBIT (+437bps)
margins expanded to 24.7 per cent and 22.4 per cent in the quarter
respectively, amid a 16.8 per cent increase in operating expenses.
Net finance costs (+103.2% year-on-year) surged in the
quarter, owing to a 129.9 per cent year-on-year increase in finance costs in
Q1, 2023 to N8.06 billion from N3.51 billion in Q1, 2022, amid a 218.5 per cent
year-on-year growth in finance income.
Overall, pre-tax profit was higher by 36.3 per cent
year-on-year to N18.53 billion in Q1, 2023. Following a tax expense of N5.73
billion, profit after tax grew by 44.3 per cent to N12.80 billion in Q1, 2023.
Cordros Securities Limited said: “Dangote Sugar’s
performance in Q1, 2023 came in as expected with profitability growing
significantly in the period. As stated in our 2022 full year update, we
maintain our expectations that the favourable demographics for sugar
consumption will remain positive for Dangote Sugar’s performance.”
Speaking at its Annual General Meeting, chairman of the
Dangote Sugar, Aliko Dangote said: “the shareholders are very happy with the
way we have been running their company and also in re-investing the profit into
the Backward Integration Programme (BIP) for the sugar industry.
“We are going to play our part in ensuring that Nigeria becomes
self-sufficient in sugar within a very short period. We are not the only
players, but we will surely play our part. We should be able to produce over
170,000 tonnes which are by far, in the history of Nigeria, the highest to be
produced locally.”
He pledged that the management would continue to implement
strategic actions to sustain the performance with the support of all
stakeholders with complete adherence to the tenets of the federal government’s
Sugar Master Plan.
Dangote said part of the success recorded by Dangote Sugar
was made possible by the management’s continued implementation of the Dangote
Sugar Development Master Plan with the rehabilitation and upgrade of the
Dangote Sugar Refinery’s Numan operations, facilities and land development, as
well as the development of the Nasarawa Sugar Company Limited, the greenfield
sugar project, and Tunga in Nasarawa State.
Dangote further said, during the year under review, the
first phase of the Sugar Master Plan implementation period came to an end and
that the federal government approved the second phase over the next 10 years,
saying, this extension came on the back of the review of the first phase by the
National Sugar Development Council and other government parastatals with
cognisance of the challenges and several circumstances that were unforeseen
which riddled the first phase of the programme.
Group managing director/CEO of Dangote Sugar Refinery,
Ravindra Singhvi said: “implementation of the Sugar Projects initiatives
continued at a high tempo despite the challenges. However, we sustained our
wins with the continued existence of peaceful environment with the communities
and the continued positive engagement with the state and community stakeholders
evidenced in their continued support of the DSR Backward Integrations Project.
“The situation of the Lau/Tau project is still the same, and
we are hopeful that the Taraba State Government will resolve the community
issues, focus on the development, rehabilitation and upgrade of our facilities
at the Dangote Sugar Refinery, Numan Operations and the Nasarawa Sugar Company
Limited, Tunga.”
He stated that, “steady progress is now being made as the
Company continues the rehabilitation and expansion project at Dangote Sugar,
Numan, and development activities at the Nasarawa Sugar Company Limited, Tunga,
saying that the Board and Management remains resolute and committed to ensuring
a sustainable future for the business with the Dangote Sugar Master Plan.
On future outlook, the CEO said: “we will continue to position
our brand strategically, optimise our processes and cost efficiency and
implementation of our strategic initiatives; the Sugar for Nigeria Backward
Integration Project Master Plan.
“This is been pursued with rigour, and the realisation of
the targets will ensure the growth of Dangote Sugar into an integrated sugar
production business and a sustainable future for the business.”
Also, Group chief finance officer of Dangote Sugar Refinery,
Oscar Mbeche said that “in 2022, the company recorded another impressive year
of financial performance and achieved growth over 2021 financial performance.
Sales volume grew by 10 per cent complimented by higher prices, contributed to
revenue growth in 2022 by 46 per cent from N276.1 billion to N403.2 billion.
“The company continued to grow its supply chain footprint in
Nigeria complimented by excellent customer care that sustained customer loyalty
to sustain the revenue growth. The company’s primary focus remains adding value
to its customers with high quality sugar.”
On Nigeria Sugar Master Plan and BIP performance, Mbeche
explained that DSR’s continued to support the development of the Nigerian Sugar
Master Plan, DSR’s backward integration (BIP) Numan operations saw the highest
volumes of sugar processed since the inception of the company, increasing by 64
per cent over 2021 volume.
He however said significant impediments still need to be
overcome, principally, the challenges of securing funds to import capital
assets to support BIP development plans, poor infrastructure, among others,
saying that these negatively impact the pace at which DSR can achieve further
financial and performance efficiencies in the BIP operations.
Dangote Sugar controls more than 60 per cent of the local
market share with its Vitamin A Fortified and non-fortified refined granulated
free flowing crystal white sugar production, packaged and distributed in
1000kg, 50kg bags, 1kg, 500g and 250g; sold under the brand name ‘Dangote
Sugar’ sold to consumers and industrial markets nationwide.